There is no difference! Hard money and private money loans are interchangeable terms that reference real estate loans with private investors as the lender, instead of institutional banks. You can potentially get a hard / private money loan when you are unable to obtain institutional / conventional financing. Possible reasons to get private money include:…
Read MoreWhen to obtain a 3rd mortgage hard money loan, it is vital to first understand its meaning. This type of mortgage is a lien on a property that goes subsequent / behind the current 1st mortgage and 2nd mortgage / heloc. A third mortgage may benefit you if you already have a 1st conventional mortgage…
Read MoreApplying for a hard money loan, especially for first-time borrowers, can be stressful and overwhelming. To help avoid possible errors, we’ve made a list of the top 3 mistakes: 1. No exit strategy Lenders want to know how you plan to repay the loan. Examples of exit strategies include: seasoned income, rental income, sell the…
Read MoreBoth Consumer and Business Purpose Loans are Available Owner occupied hard money loans to purchase or refinance is a niche loan program not offered by all lenders. The benefit is that you now have access to money even though you can’t qualify through a bank or institutional lender. Owner occupied is when the borrower resides…
Read MoreApplying for a Conventional Mortgage To purchase or refinance, self-employed borrowers might have an issue qualifying. Lenders are required to document the borrower’s ability to repay through a formula called DTI ratio (debt-to-income). There are two forms of DTI: front-end and back-end. Front-end DTI equals PITI (principal, interest, taxes, and insurance) divided by gross monthly income. Back-end DTI equals PITI plus…
Read MoreA stated income loan is when a borrower does not provide income documentation such as bank statements, tax returns, or W2’s. Rather, the borrower simply states their income on the loan application. After the government passed Dodd-Frank in 2010, stated income loans are only permitted for business purpose loans, not consumer loans. As explained in previous blogs, a business purpose loan is business related, including…
Read MoreA borrower might need to access additional equity when they already have a 1st mortgage. A mortgage that goes subsequent / falls behind the 1st mortgage is called a 2nd mortgage. Marquee Funding Group offers 2nd mortgage hard money / private money loans for owner occupied and non-owner occupied properties. Property types include: single family…
Read More1. Only business purpose loans are available Most hard money / private money lenders only offer business purpose loans. A business purpose loan is when a borrower uses the loan proceeds for investment purposes, such as purchasing an investment property or pulling out equity to invest in their business. On the other hand, a consumer…
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